Alabama becomes ghost of its corporate past

Most of the long list of public companies with headquarters in Alabama in 1998 have been erased from the state's landscape.

Their names ring out and conjure painful, hollow memories.

QMS Systems. Martin Industries. Birmingham Steel. The recent departures are even more hurtful, like SouthTrust Corp. Worse are the ones who left on their own volition. They weren't bought out or taken private or turned into the Alabama branch of another company. They simply hightailed it for greener pastures, companies such as Torchmark Corp. and Caremark Rx.

All of them are the ghosts of Alabama's history of publicly traded companies that traded on a major exchange, firms which once called the Heart of Dixie their corporate home, with all the high front-office salaries, generous charitable giving and priceless headline prestige that came with them.

They have left for many reasons, but left they surely have. In December 1998, 48 publicly traded companies called Alabama home.

Today, there are 19.

"Large corporate headquarters employ a large of numbers of people doing everything from marketing to internal accounting to legal work," said John Norris, managing director of Birmingham-based Oakworth Capital Bank. "When the headquarters moves to another state the need for these jobs diminishes and the local firms providing ancillary services have to scramble to make up for lost revenue."

There are a number of reasons for the exodus:

The largest percentage of the 48 companies on the 1998 list no longer in the state were acquired by or combined with other firms.

Many have maintained their Alabama operations. Mobile-based color printer manufacturer QMS Corp., for example, lives on as a branch of Konica Minolta Printing, after it was bought in 2000. The company still offers paychecks to 50 people at a distribution center in Mobile, but with none of the clout for Mobile and Alabama of the corporate headquarters.

Mega-deals such as those at Compass Bancshares have mostly smiled on Birmingham. The acquisitions were strategic for the buyer, meaning most Magic City headquarters and operational jobs have been saved.

Even the 2006 cross-town banking merger of AmSouth Bancorp. and Regions Financial Corp. hasn't been unreasonable, with the 6,000 worker payroll at the one surviving company about the same as the two before the deal.

The next largest chunk that is no longer present up and moved to a new city while maintaining the same capital and corporate structure as before. The most recent was Torchmark Corp., the parent company of Liberty National Life Insurance. It was lured in 2006 to a suburb of Dallas, where it now employs about 1,000 people, with $4.6 million of incentives.

Another subset of the companies imploded and dissolved in or out of bankruptcy, or is in the process of doing so. Two called Birmingham home -- Vesta Insurance Group and Just For Feet Inc. The most recent victim is Montgomery-based Colonial BancGroup, which was seized by regulators last year as it drowned in unpaid loans. The branches and deposits were sold to a rival and the publicly traded holding company is a shell to accommodate the legal requirements of bankruptcy.

Another platoon voluntarily suspended trading on a major exchange, citing the costs of complying with the accounting rules and regulatory requirements. They were all small companies, such as Jasper-based Pinnacle Bancshares, whose few thousand shares outstanding continue to trade on an electronic stock market called the Over-The-Counter Bulletin Board.

As for the pipeline of new companies, it has become empty. The last initial public offerings of Alabama companies were in 2005, when four sold shares on the open market for the first time. Only one is left as a publicly traded company on a major exchange, Birmingham's Medical Properties Trust.

Fellow 2005 IPO alum CapitalSouth Bancorp was seized by regulators last year and sold off. Nexity Financial Corp. had shares removed from major exchange trading last year and now trades on the OTC Bulletin Board.

"Last decade, all you needed was a crazy name and an even crazier business model, and your IPO was well received," said Norris, of Oakworth Capital. "These days, you had better work out all the kinks. Given the current economic, political, and regulatory environment, I can't imagine a huge number of sizable Alabama firms looking to go public this year."

There is a little light in the pipeline. This year, Tampa-based Walter Energy will move its headquarters to the Birmingham area. A one-time industrial conglomerate with businesses all over the place, its core is now in Alabama, with fleet of coal mines and the former Sloss Industries, now called Walter Coke. The company will occupy offices in Hoover, and hire 80 new workers from the metro area.

"The headquarters of a major publicly traded company is key to attracting new investment and new jobs," said Mike Shattuck, director of research of the Birmingham Business Alliance. "We have lost a number due to a variety of reasons, but these are the types of companies you want, ones with long and sustainable growth."